Your Firm Has Subsidiaries Throughout the World

question 357

True/False

Your firm has subsidiaries throughout the world. Due to the recent depreciation of the dollar against most foreign currencies, the dollar value of your foreign sales has declined as reflected on the parent's financial statements, even though sales growth is strong. The following was an example of a short run exchange rate risk.

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Definitions:

Macroeconomics

The branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregate changes in unemployment, GDP, inflation, and economic policies.

Large Firms

Companies or enterprises that operate on a large scale, often having considerable market power and resources.

Economy

The structure of economic activity in a community, a region, a country, a group of countries, or the world

Normative Economic Statement

A statement that reflects an opinion, which cannot be proved or disproved by reference to the facts.